‘Amazon closes EU deal and gives third-party products the same treatment in buy box’

Amazon has reportedly reached agreement with the European Commission over its concerns about the use of competing sellers’ data. For example, Amazon would from now on give products from third parties equal treatment in the ‘buy box’.

According to several sources with direct knowledge of the matter, Amazon has pledged to increase the visibility of rival products by giving them equal treatment in Amazon’s buy box, writes the Financial Times. That framework on Amazon’s site is responsible for the lion’s share of purchases on the site. In addition, there will be an alternative ‘Featured offers’ for customers who place little value on how quickly they get their purchases delivered. Sellers are also given the freedom to decide which company should deliver their goods.

This deal was to be officially announced on December 20 by the European Commission, the EU’s competition regulator. Amazon’s commitments would have been market tested, involving competitors, and EU officials would have agreed. Amazon’s various commitments would apply for five years. It is unknown whether they will expire afterwards or whether other elements will take their place.

This agreement, reportedly reached, would put an end to a Commission investigation launched in 2019. The question revolved around whether Amazon’s use of sensitive data from independent sellers on its platform gives the company a competitive advantage. If that investigation leads to the conclusion that Amazon is breaking EU rules, it could lead to a fine of up to 10 percent of Amazon’s global turnover. So it doesn’t seem to come to that now.

This EU study looked at two aspects. The Commission looked at standard contracts concluded between Amazon and the marketplace vendors, as they would allow the company to analyze and use third-party sales data. In addition, the research focused on the role that the collected data plays in the selection of the winners of the buy box. This is a field on the right side of an Amazon product page that highlights a specific seller and allows buyers to put their product directly into the digital shopping cart. Providers in this box have a great advantage, because they stand out prominently and because this makes it possible to purchase the product quickly.

The recently enacted Digital Markets Act is also believed to have played a role in reaching an agreement between the EU and Amazon. This EU law mainly focuses on so-called gatekeepers, often large tech companies with a relatively dominant platform, which also looks at their annual turnover and the number of users. One of the practices prohibited under the DMA is offering gatekeeper products more favorably, in the sense of ranking better or higher than those of third parties who are also active on the platform with similar products.